Vodafone confirmed on Tuesday that it "pulled out of a proposed naming rights deal with the London Stadium," according to James Gheerbrant of the LONDON TIMES. A draft contract for a £20M ($26M), six-year deal had been with Vodafone’s board since the start of last month and the contract was "due to be signed in time for the start of next season." The decision not to become associated with the London Stadium comes as Vodafone "reported an annual loss" of £5.2B ($6.7B) worldwide, with profits down 31% in the U.K., a downturn "blamed largely on the weakness of sterling." London E20 Stadium, the company set up to manage the former Olympic stadium in Stratford, London, "will return to the market after the summer to find a new naming sponsor." Talks with the Mahindra Group, an Indian conglomerate, "collapsed last year" (LONDON TIMES, 5/16). THE DRUM's Tony Connelly reported the news comes "amid an investigation" of EPL side West Ham United's transfer business by U.K. tax authority HMRC, which "raided the Premier League club's offices last month and seized documents." Sources reportedly insisted that the breakdown in negotiations is "not related to the investigation from tax authorities." A naming rights deal is regarded as "crucial in helping the club pay" for the £2.5M ($3.2M) annual rent for the stadium. Under the terms of West Ham’s lease agreement with the London Legacy Development Corp., the publicly-funded joint venture that owns the stadium, the club is entitled to 40% of any naming rights deal over the value of £4M ($5.2M) a year. Vodafone has been "noticeably absent" from sports marketing after it ended its seven-year title sponsorship of the McLaren Formula 1 team in '13 (THE DRUM, 5/16).
SEARCH IS ON: In London, Ben Rumsby reported a lack of sponsor for the first season of West Ham’s anchor tenancy "prevented the taxpayer clawing back millions of pounds of public money spent on converting the London 2012 centrepiece into a Premier League ground." Sources said that Vodafone "ultimately decided not to complete the deal because it could not reconcile the sponsorship opportunity on offer with its current marketing strategy." The agency tasked with finding a naming rights partner, ESP, "could pay the price for a second collapsed deal in a matter of months, which also compounds concerns about the attractiveness of the proposal on offer" (TELEGRAPH, 5/16).
